Every year, claim auditors deliver significant value to employer-funded health plans, which are their main clients. Running a medical and Rx audit helps the bottom line by typically identifying recoverable overpayments that can amount to two to four times the cost of the audit itself. Beyond immediate financial recoveries, these audits often result in system improvements that minimize future errors, amplifying their overall impact. Medical and pharmacy benefit plan sponsors stand to benefit greatly from routine audits or ongoing monitoring of claims with the thorough reports each produces.

Interestingly, claim audits originated as a regulatory and compliance measure, though their role in financial management has grown. Initially, audits relied on random samples, revealing broad trends but lacking detail. Today, thanks to advanced software and systems, auditors analyze every claim processed, generating detailed and factual reports. This shift has made more frequent audits standard practice, especially among large corporate and nonprofit employers who self-fund their benefit plans. While each audit category demands specialized knowledge, all present opportunities to recover overpayments.

Recently, a large employer has taken legal action against its third-party claim processor, highlighting significant cases of alleged overpayments and overcharges. The issues outlined in this lawsuit are likely the same ones that audits spot during their reviews. The complexity of medical billing poses challenges, and accurately paying claims according to plan provisions requires attention. Even with exceptionally low error rates, audits can uncover substantial recoveries by identifying mistakes that are often hidden within the intricacies of complex claims. That's why having knowledgeable specialist auditors is crucial.

For those familiar with the era of random sample audits, witnessing a 100 percent review can be quite revealing. Thoroughly examining each claim allows for recovering individual overpayments rather than those tied to larger error trends. This approach underscores the necessity of routine audits to avert potentially million-dollar issues. Particularly during times of increased usage and rapid change, such as the coronavirus pandemic, it is prudent to review claims closely soon after they have been processed. Working near real-time rather than in arrears is more efficient, and recoveries are easier.